They were abandoned and needed significant work which wasn't a huge issue but in terms of HUD owned properties i heard there can be significant processing periods.

The quick short answer in my opinion is this: If you want growth stick to the small multis that you know and once the mortgages are paid off retire fully.

During this renovation period would you, as the lender, want an Actual Cash Value or Replacement Cost policy in place?

Quote from @Fred Scott: Sunrise Capital Investors - Mobile Home Park Investment FundI've seen a few posts about them here but none of them actually talks about what the actual annual returns have been.They are advertising heavily for passive tax deductions which is fine but what are the actual returns over a period of (say) five or ten years?

I noticed the market was shifting, so didn't run to get under contract until day 43 of the identification period.

My underwriting would have this large negative cash flow for 7 years.I would do a thorough underwriting but want to show using quick math the issue so I will use the 50% rule.  

I tend to ask the same questions multiple times over a period of time to see if I get consistent answers.

The heating system, while straightforward, wasn't cheap for my 3 unit and will have a longer payback period. 

When a rental is taken out of service for personal use the accumulated depreciation goes away over a short period of time. 

However what happens when the tenant vacates and now the unit has to be turned over/takes a few months to find a new tenant and during that same period of time the sewer line goes and you get hit with that $15,000 cap ex expense in addition to the vacancy and turn over costs.